University of Alabama board of trustees ask state for more funding

Saturday

Nov 9, 2013 at 12:01 AMNov 9, 2013 at 12:08 AM

The University of Alabama board of trustees is asking the Alabama Legislature to fund the system at 2008 levels, a consistent request for the three-campus system since state appropriations for higher education declined drastically during the past five years because of the economic downturn.

By Ed EnochStaff Writer | The Tuscaloosa News

The University of Alabama board of trustees is asking the Alabama Legislature to fund the system at 2008 levels, a consistent request for the three-campus system since state appropriations for higher education declined drastically during the past five years because of the economic downturn.The trustees approved a request for $611 million in state funding for fiscal year 2015, which begins in October 2014, during their November meeting Friday on the UA campus. The current fiscal-year appropriation is $450 million.The board also approved a related request for approximately $291 million in state funding during fiscal year 2015 for capital improvements, including $145 million for new projects.Ray Hayes, executive vice chancellor of Finance and Operations, said the system has been requesting 2008 funding levels since 2009. The system has not received an appropriation for capital improvements in a few years, he said.Responding to a question from Trustee Finis E. St. John IV about his thoughts on the request, System Chancellor Robert Witt argued the roughly $160 million increase would further the system’s ability to provide a highly educated workforce for Alabama and help students leave with less debt.“I don’t believe there is a better investment the state of Alabama could make,” Witt said.The system will continue to advocate for more state funding and work to keep tuition increases at a minimum, the chancellor said.While state Rep. Bill Poole, chair of the Alabama House Ways and Means Education Committee, believes the state will eventually return to 2008 funding levels for higher education, how fast will be determined by the state’s recovery from the economic downturn.Any further downturns, Poole said, would “do damage” to the Education Trust Fund, which provides funding for K-12, and two-year and four-year public colleges in the state.But the recent trends in revenues for the state’s Education Trust Fund have the Tuscaloosa Republican optimistic for the upcoming fiscal years.The fund ended the fiscal year in September with a $260 million surplus, which was used to repay money borrowed from the state’s Rainy Day Trust Fund to shore up state budgets, Poole said.Poole said the surplus during 2013 makes state lawmakers optimistic for similar revenues in 2014, though he cautioned it was too early in the year to get a clear estimate and the funds would also likely be used to repay the rainy day fund.Poole said the Education Trust Fund appropriations in 2014 total $5.57 billion. It is estimated to increase to $5.9 billion in fiscal year 2015.“We feel very good about that, but clearly we are still in an economic recovery,” Poole said.State lawmakers will return to Montgomery for the 2014 regular session in January.During his comments to the trustees on Friday morning, Witt described the decline in state funding as part of a series of related negative trends facing universities nationwide. The system estimates the cumulative effect of the loss in annual state funding since 2008 is approximately $ 1 billion. Witt ranked the decline as the most significant challenge for universities and said it has precipitated a related trend of regular tuition increases. UA increased its tuition this fall by 2.7 percent for residents and about 4.4 percent for non-residents. The university has seen its tuition more than double in the last decade with annual increases.The tuition increases are helping contribute to a trend of students leaving college with more loan debt, Witt said. Universities are also faced with greater operating expenses.In response, the UA System has been more aggressive about looking for ways to reduce operating expenses and increase non-tuition revenues, Witt told the trustees.The chancellor cited federal grants and contracts, philanthropy, and non-traditional sources such patents and licensing, merchandising and online education as alternative opportunities for the system to increase revenues.Witt estimated merchandising and licensing had generated about $9 million for the system last year and revenue from online education about $19 million.“Our challenge now is to take the cost reduction seen on the campuses to the system level,” Witt said.The chancellor noted efforts to streamline the operations of the system — including consolidations of purchases and administrative operations — had generated more than $7.5 million in annual savings. Witt speculated by next fall the system can achieve $10 million in savings.“Every dollar we can take out of our operating costs is a dollar less that we have to raise tuition ...” Witt said.The system is also looking at options to reduce costs and share resources by consolidating library functions on the three main campuses and expanding its capacity to share faculty between the campuses as a way to accommodate enrollment growth, Witt said.In other business, the trustees advanced 12 construction projects at UA, including the renovation and expansion of the Thomas-Sewell Stadium, the ongoing renovation of the Ferguson Student Center, a facility at the Park at Manderson Landing for the women’s rowing team, the demolition of Palmer and Somerville residential halls, and a severe weather shelter on the east side of campus.The trustees also approved a $949,200 amended lease agreement with Tuscaloosa I LLC. for apartments at the Lofts at City Center in Tuscaloosa during the 2014-2015 school year to provide additional university housing for upperclassmen.The board is scheduled to meet next in February 2014 in Birmingham.

Reach Ed Enoch at ed.enoch@tuscaloosanews.com or 205-722-0209.

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